Tribunal fees are unlawful and must be scrapped, the Supreme Court ruled today, in a shock judgment that means those who have paid to bring a case over the past four years will be refunded.
Unison, which brought the case to court, challenged the government’s decision to introduce tribunal fees under a piece of secondary legislation (rather than a full Act of Parliament) in July 2013. The trade union lost its case at both the High Court and the Court of Appeal, but appealed to the Supreme Court.
In today’s unanimous judgment of seven Supreme Court judges, Lord Reed noted that employment tribunals “are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs and those who are vulnerable to long-term unemployment”. The fees, the judges concluded, were preventing access to justice.
The ruling also noted that the charges were indirectly discriminatory towards women, who were more likely to bring a more costly (and serious) Type B case than a Type A case, and contravened EU law.
In the light of the decision, the lord chancellor will be quashing the fees order that introduced the fees, which can amount to as much as £1,200 for a single claim, and refunds will be issued to those who paid to bring a case. Unison said these refunds would amount to more than £27m.
“The government is not above the law,” said Unison general secretary Dave Prentis. “But when ministers introduced fees, they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.”
Rachel Suff, employment relations adviser at the CIPD, said: “Given the staggering drop in claims since tribunal fees were introduced in 2013, it's clear that the fees were denying access to justice for many people. Sadly, this suggests that some perfectly valid claims have never been heard.”
Experts pointed out that today’s decision would likely lead to a sudden increase in the number of tribunals. Figures cited during the course of the case suggested that the number of tribunals brought since fees were introduced has dropped by as much as 70 per cent.
The fees were originally introduced to reduce costs to taxpayers and deter vexatious claims, which many feared were reducing hiring intentions and causing a backlog in the court system. But unions and other groups have consistently campaigned against the fees, claiming they would reduce access to justice and allow rogue employers to go unpunished.
Calling the ruling “dramatic”, Paul McFarlane, chair of the Employment Lawyers Association’s legislative and policy committee and partner at Weightmans, explained: “Once fees are scrapped it is likely that there will be a significant rise in the number of claims being brought. This will have knock-on implications for business, Acas and the employment tribunal system itself – all of whom will have deal with the increased volume of claims.”
Emma Burrows, head of the employment department at Trowers & Hamlins, agreed that claim numbers could bounce back and added: “Employers will also need to reassess their approach to risk when facing potential disputes with employees.”
An ongoing Twitter poll of People Management readers revealed that 70 per cent were pleased with the outcome of the case.
Commenting that government would consider the full details of the judgment, justice minister Dominic Raab said: "The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid."